Dems Prepare Fallback Options, Even as Biden ‘Confident’ US Will Avoid a Default
The Debt

Dems Prepare Fallback Options, Even as Biden ‘Confident’ US Will Avoid a Default

Reuters/Kevin Lamarque

President Joe Biden expressed optimism Wednesday that negotiations with Republicans will result in a budget deal that will raise the debt limit and avoid an unprecedented debt default. Yet even as he did so, the political posturing around talks continued and members of Biden’s party continued to work on fallback plans.

“I’m confident that we’ll get the agreement on the budget, that America will not default,” Biden said before departing for a Group of Seven summit of world leaders in Japan, adding, “To be clear, this negotiation is about the outlines of what the budget will look like, not about whether or not we’re going to, in fact, pay our debts. The leaders have all agreed we will not default. Every leader has said that.”

Biden shortened his planned overseas trip, canceling visits to Australia and Papua New Guinea. He is now scheduled to return from Japan on Sunday, which he said would be in time for the final stage of negotiations. Biden also said he would hold a press conference on the debt talks when he returns.

McCarthy told reporters that reaching a deal by Sunday is “doable.” In the meantime, as negotiations continue, so does the politicking. “God forbid you get a Biden default because he ignores the problem, just as he ignored the border,” the speaker told reporters at a news conference.

McCarthy got what he wants: The new negotiating structure that Biden, McCarthy and the other congressional leaders agreed to at their meeting Tuesday reduced the number of people involved in the talks. The change puts McCarthy in a strong position, as Carl Hulse of The New York Times writes: “Speaker Kevin McCarthy got what he wanted out of Tuesday’s debt limit talks at the White House — the chance to go one-on-one against President Biden.”

McCarthy has also effectively defined the terms of the discussions, which are centered around the key elements of the Limit, Save and Grow Act passed by House Republicans: spending caps, rescinding unspent pandemic funds, energy permitting reform and stiffer work requirements for social programs.

“The negotiators are not talking about Democratic priorities,” The Washington Posts’ Leigh Ann Caldwell and Theodoric Meyer note. “Raising taxes on the wealthy, lifting the corporate tax rate and cutting defense spending at similar levels to nondefense spending are all typical Democratic asks — but they’re not central to the conversation at the moment.”

Work requirements: Biden, who had signaled this weekend that he might be open to stiffer work requirements on some federal safety net programs besides Medicaid, reminded reporters that he had voted in favor of added work requirements in the past. Those comments sent the White House and Democrats scrambling to clarify their opposition to the additional work requirements Republicans are now proposing. “So-called work requirements are a nonstarter,” House Democratic Leader Hakeem Jeffries of New York told CNBC Wednesday.

On Wednesday, Biden was asked which work requirements he’d be willing to accept. “I'm not going to accept any work requirements that's going to impact on medical health needs of people,” he said. “I'm not going to accept any work requirements that go much beyond what is already — what I voted years ago for the work requirements that exist. But it's possible there could be a few others, but not anything of any consequence.”

McCarthy laughed at that notion. He has insisted that stronger work requirements be part of any deal. Those requirements may be a key element he needs to keep conservatives in his conference on board with a compromise that might otherwise fall short of their full wish list. “The work requirements only save about $1 billion per year, according to the Congressional Budget Office, a mere fraction of the amount Republicans want to cut, but they are a top ideological priority for conservatives,” the Post notes.

Dems move ahead with discharge petition: Rep. Brendan Boyle, the Pennsylvania Democrat who is the ranking member of the House Budget Committee, filed a discharge petition that would force a vote on a debt ceiling bill. The petition requires the signatures of 218 House members, and though Jeffries urged his 213 members to sign, Republicans in the House and Senate aren’t going to provide their help at this point. “Filing this petition does not preclude a deal or prevent other action – but it does create flexibility so Congress can come together to act,” Boyle said in a statement.

A group of Senate Democrats, meanwhile, is circulating a letter urging Biden to be ready to invoke the 14th Amendment to bypass the congressional talks and address the debt limit unilaterally, according to The Washington Post. “The letter, signed by five senators so far, reflects building unease among White House allies over the direction of negotiations,” the Post’s John Wagner, Marianna Sotomayor and Jeff Stein report.

“We are in a situation where these extreme Republicans in the House are demanding completely untenable policies in exchange for not driving the country’s economy off a cliff,” Sen. Tina Smith of Minnesota, one of the signatories, told the Post. “I think it’s important we understand there is another option.”

Some Senate Democrats remain skeptical that McCarthy can deliver a deal, or get his members to swallow a compromise. “I’m just very skeptical that there’s going to be an agreement in time,” Sen. Chris Murphy of Connecticut told Politico. “We’re gonna get to a point where McCarthy has to decide whether he’s willing to proceed to default.”

But Senate Majority Leader Chuck Schumer on Wednesday again called for bipartisanship rather than a one-sided approach. “Bipartisanship is needed. It’s the only way to go,” he said. “Nobody will get everything they want in these discussions, and I hope nobody — nobody — draws red lines in the sand.”